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news
Sigma Sports in Hampton Wick via FacebookSigma Sports set for expansion as private equity firm buys into business
Sigma Sports is set to expand its operations after a private equity firm bought a minority stake in the business, founded in southwest London in 1992 and in 2019, the latest year for which figures are available, turning over almost £34 million.
Primary Capital Partners says that its “significant investment” in the retailer will help it further expand its e-commerce operations, especially internationally, as well as opening more stores.
“Strong market growth and Sigma Sports’ differentiated proposition offers an opportunity for the business to continue its impressive growth story, accelerated through further investment in its e-commerce platform,” the private equity firm says.
“Despite the business having focused on the large UK opportunity to date, it already has an international sales profile which can also be further developed in selected territories.
“The fast growing eBike and gravel bike segments also allow the business scope for product expansion, in addition to broadening the range to include lower, though still premium, price points.
“Additionally, Sigma Sports has recently launched its own clothing brand, Universal Colours, following the success of its own parts & accessories brand VEL.
“Sigma Sports will also open a limited number of carefully selected additional destination stores,” it added.
Ian Wittingham, chief executive of Sigma Sports, who founded the business with Jason Turner in 1992, said: “We are delighted to have the backing of Primary to work alongside us as we begin the next part of our journey.
“It is an exciting time as we continue to deliver year on year growth, fuelled by our passion for customer experience alongside working with the best brands in the industry."
The company’s 9,000 square foot store at Hampton Wick is a destination for cyclists from southwest London and beyond, stocking a number of leading brands.
It also has a distribution centre in Grantham, Lincolnshire, which helps serve its growing online business, now accounting for more than half its turnover, with Sigma Sports relaunching its website last year.
In September last year, Sigma Sports opened its second physical store, covering 4,000 square feet in Oakham, Rutland, although restrictions including on numbers of customers are currently in place as a result of the coronavirus crisis.
The company also has a collection point in Esher, Surrey where customers can pick up click-and-collect orders.
The HSBC-backed deal was led by Andy Currie, managing partner at mid-market investment banking firm Alantra, who said: “Sigma Sports has established itself as a leading player in the cycling industry and is the go-to retailer for premium brands.
“The company prides itself on the quality of its products, the content it produces and creating a community for customers.
“The company has recently experienced rapid growth, and with Primary’s support, we look forward to seeing Sigma Sports continue this growth story.”
Simon joined road.cc as news editor in 2009 and is now the site’s community editor, acting as a link between the team producing the content and our readers. A law and languages graduate, published translator and former retail analyst, he has reported on issues as diverse as cycling-related court cases, anti-doping investigations, the latest developments in the bike industry and the sport’s biggest races. Now back in London full-time after 15 years living in Oxford and Cambridge, he loves cycling along the Thames but misses having his former riding buddy, Elodie the miniature schnauzer, in the basket in front of him.
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26 comments
Spent thousands with them over the years.
Now however, its time to find a new shop.
The PE vultures will destroy the firm, and I certainly aren't going to be spending my money on stuffing pound notes into the PE boys pockets.
Agree. Just watch as they dump a tonne of debt onto Sigma. If you have loyalty cards or vouchers or discounts, cash them in now.
I did a group charity ride last year (just before lockdown) for the Palace for Life Foundation (Crystal Palace FC's charity). 30 of us rode from Selhurst Park to Bournemouth for the Bournemouth v Palace match (or not, as it turned out - is was the weekend the Premier League stopped before of covid). Sigma devised the route and provided the ride support and guides. They were brilliant and a joy to ride with. (And got me a mention in the Guardian and the Mail https://www.theguardian.com/football/2020/mar/15/crystal-palace-fans-com... )
Great shop, online and in store, i have used them for bikes and kit for years. They are a good bunch. But seldom does investment not require return and this often leads to corners cut and quality reduction. Fingers crossed they will be an exception. Rapha is strange one, the range has grown so big since they were sold it almost hard to fathom now, not sure on the effect this has had on quality but it certainly reduced the RRC, i believe they lost more than half thier members.
I've used them before with success. Hopefully later in the year I will visit the store, as they are not too far from relatives.
I am relieved that the stake is only a minority one.
I'm a regular Sigma customer, and they are head and shoulders above any other cycling retailer I've ever encountered. I most value their knowledge. I can go to their Hampton Wick store and know I'll get solid advice.
My concern reflects some other comments about route to financing expansion, but I can only wish them luck with growing the business while maintaining that high end specialist knowledge.
Old man chat , but I remember buying a quality Adidas jersey from the Hinchley Wood emporium- still got it somewhere But it might be a snug fit!
I have similar items that seem to shrink in the wardrobe...
Funny how any slightly negative business story on this site has the rabid lefties out in force decrying Brexit and saying "told you so!".
Where are they now there's a story about a British cycling business expanding?
Nobody's complaining about Br**** on this one - just the activities of the asset stripping vampires that we euphemise as "private equity"
As a rabid(?) leftie it's hardly surprising that a cycling business is expanding during a pandemic when the demand for bicycles is at an all-time high. You can't really judge a big political change (like Brexit) by cherry-picking a single business.
Anyhow, I've bought a few items from Sigma in the past and they do a good job, so good luck to them and I hope they provide a bit of competition to Wiggle.
Duplicate post
I had a quick scan, but nowhere could I find "thanks to Brexit", or "none of this would have been possible in the EU". Maybe you can help me out?
Saying "see, some companies are surviving!" is hardly an endorsement for this mess.
I think Brexiters have indeed redefined a Brexit benefit as "See, not everyone's gone bust". Bit of a far cry from what Leavers promised but here we are.
The only person on this thread who has even mentioned Brexshit is you. You won. Get over it.
And yet he also lost, along with everyone else....
Cycle Surgery and Evans did so well with this business model, this is bound to be a sure fire success. Well done lads
My non-cyclist wife bought me a generous Christmas present from Sigma as was very impressed with the advice and service she had when she called.
They seem a decent bunch, I hope the investment works for them.
I have never known a company bring in Vulture Capitalists and improve their customer relationship. Any sense of past loyalty and old fashioned service is replaced with an absolute focus on increased profit. If the company disappoints its new owners, they are cast aside and left to die. Mavic is a classic case, sold down the road until no one actually knew who owned them.
Mavics demise was more likely down to the reduction in quality of their products, coupled with an insane business model whereby they threw away all spares after five years and redesigned their range. Anyone who broke a spoke on a set of wheels over five years old had to bin them, not a good way to treat your customers. Like many large companies, they forgot that the customer was King, and didn't give a fuck about them.
and why did the quality go down, and why did they bin stuff...because the series of owners wanted profit not product...
At the risk of being pedantic, it is a drive for cash generation that typically kills a business once private equity gets involved. They will sweat the shit out of the assets, cut staff, run down inventory, force creditors to wait longer for payment etc. in order to get their cash back ASAP, hollowing out the actual business in the process.
I hope the owners know what they're doing here.
it feels strange that they consider opening more physical stores is part of the growth strategy, given the past year weve just had, and that Rapha seemed to try that unsuccessfully before.
true you can only sell so many bikes via a physical shop presence,and it might be limiting their ability to grow really really big at the moment, but the rest of the stuff they sell is classic ecommerce box shifting, how much bigger can that grow ? and broadening ranges to include lower end stuff, sounds distinctly sweating the assets and ending up with a bunch of stuff thats forever discounted because it just wont sell.
Indeed. Sigma's stock is all high end stuff - really good range of Castelli kit, for example, with all the sizes in stock. I bought my Spatz overshoes from them in December - not many places sell them. As you say, it seems a bit odd to dilute the brand with cheap inventory.
Maybe the owners are looking for an exit strategy. The PE normal method is to squeeze all the cash they can out of the business and flog the husk to some poor sap just before it falls over. That would be a shame.
"Private equity firm" - or, as we like to call them, asset stripping vultures...
I remember when Sigma Sport was a shelf in Jason's mums house! I bought my first pair of Time clipless pedals there back in the ealy 90's.
Good to see them doing so well.